Short-term Forecast for October 22, 2013

| October 22, 2013

S&P 500 Index Daily Chart Analyses

The following technical and cycle analyses provide short-term forecasts for the S&P 500 index. For intermediate-term outlooks see the latest intermediate-term forecast and for long-term outlooks see the latest long-term forecast.

Technical Analysis

The index closed moderately higher today, moving up to a new high for the cyclical bull market from 2009. Technical indicators are bullish overall, strongly favoring a continuation of the advance.

Cycle Analysis

We are 9 sessions into the beta phase rally of the cycle following the short-term cycle low (STCL) on August 27. The beta high (BH) will likely form sometime during the next 5 sessions. The magnitude and duration of the beta phase rally reconfirms the current bullish translation and favors additional short-term strength. The window during which the next STCL is likely to occur is now through November 4, with our best estimate being in the October 29 to November 4 range.

  • Last STCL: August 27, 2013
  • Cycle Duration: 39 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: Now through November 4; best estimate in the October 29 to November 4 range.
  • Setup Status: No active setups.
  • Trigger Status: No pending triggers.
  • Signal Status: No active signals.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A close above current levels would reconfirm the cyclical bull market from 2009 and forecast additional gains.
  • Bearish Scenario: A reversal and close below the middle of the Bollinger bands near 1,701 would predict a return to uptrend support near 1,664.

The bullish scenario is more likely (~70% probable).

US 10-year Treasury Note Yield Daily Chart Analyses

The following technical and cycle analyses provide short-term forecasts for the 10-year Treasury note yield. For intermediate-term outlooks see the latest intermediate-term forecast and for long-term outlooks see the latest long-term forecast.

Technical Analysis

Yields closed sharply lower today, moving down to a new low for the downtrend from September and approaching congestion support in the 2.48% area. Technical indicators are bearish overall, strongly favoring a continuation of the decline.

Cycle Analysis

We are 5 sessions into the decline phase of the cycle following the short-term cycle high (STCH) on October 16. An extended decline phase that moves well below the last alpha low (AL) near 2.61% would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, a quick rebound followed by an extended rally phase that moves well above the last STCH near 2.74% would signal the likely transition to a bullish translation. The window during which the next STCH is likely to occur is from November 5 to November 26, with our best estimate being in the November 11 to November 15 range.

  • Last STCH: October 16, 2013
  • Cycle Duration: 5 sessions
  • Cycle Translation: Bearish
  • Next STCH Window: November 5 to November 26; best estimate in the November 11 to November 15 range.
  • Setup Status: No active setups.
  • Trigger Status: No pending triggers.
  • Signal Status: No active signals.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A rebound and close well above congestion resistance in the 2.71% area would predict a move up toward the previous high of the uptrend from May near 2.98%.
  • Bearish Scenario: A close below congestion support at the 2.48% level would reconfirm the downtrend from September and forecast additional losses.

The bearish scenario is more likely (~70% probable).

US Dollar Index Daily Chart Analyses

The following technical and cycle analyses provide short-term forecasts for the US dollar index. For intermediate-term outlooks see the latest intermediate-term forecast and for long-term outlooks see the latest long-term forecast.

Technical Analysis

The index closed sharply lower today, moving down to a new low for the downtrend from July. Technical indicators are bearish overall, strongly favoring a continuation of the decline.

Cycle Analysis

We are 4 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on September 18. The magnitude of the beta phase decline reconfirms the current bearish translation and favors additional short-term weakness. The window during which the next STCL is likely to occur is now through October 28, with our best estimate being now through October 24.

  • Last STCL: September 18, 2013
  • Cycle Duration: 24 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: Now through October 28; best estimate now through October 24.
  • Setup Status: No active setups.
  • Trigger Status: No pending triggers.
  • Signal Status: No active signals.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A rebound and close well above congestion resistance at the 81 level would predict a move up toward the previous short-term high at 82.67.
  • Bearish Scenario: A close below current levels would reconfirm the downtrend from July and forecast additional losses.

The bearish scenario is highly likely (>80% probable).

Gold Daily Chart Analyses

The following technical and cycle analyses provide short-term forecasts for the gold market. For intermediate-term outlooks see the latest intermediate-term forecast and for long-term outlooks see the latest long-term forecast.

Technical Analysis

Gold closed sharply higher today, reacting further off of recent short-term lows and approaching congestion resistance in the 1,350 area. Technical indicators are slightly bullish overall, tentatively favoring a continuation of the rebound from last week.

Cycle Analysis

The strong advance today has caused a change to our preferred scenario and it is now likely that the low on October 11 was a short-term cycle low (STCL) and not a beta low (BL). We are 1 session into the beta phase rally of the cycle following the STCL on October 11. The magnitude and duration of the rebound off of the last STCL signals the likely transition to a bullish translation and favors additional short-term strength. The window during which the next STCL is likely to occur is from October 29 to November 8, with our best estimate being in the October 29 to November 4 range.

  • Last STCL: October 11, 2013
  • Cycle Duration: 7 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: October 29 to November 8; best estimate in the October 29 to November 4 range.
  • Setup Status: No active setups.
  • Trigger Status: No pending triggers.
  • Signal Status: No active signals.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A close well above congestion resistance at the 1,350 level would predict a return to the short-term high in August near 1,418.
  • Bearish Scenario: A reversal and close below the recent short-term low near 1,273 would confirm a break below congestion support in the 1,275 area and predict a move down toward the previous low of the cyclical downtrend from 2011 near 1,200.

The bullish scenario is slightly more likely (~60% probable).

Gold Currency Index Daily Chart Analysis

The Gold Currency Index (GCI) is a composite of gold prices in the currencies of 10 of the largest economies in the world as defined by GDP. It is therefore currency independent, reflecting the intrinsic value of gold as an international currency itself.

Technical Analysis

The GCI closed sharply higher today, reacting further off of the congestion zone at the 33 level near recent short-term lows. Technical indicators are slightly bullish overall, tentatively favoring a continuation of the rebound from last week.

Short-term Outlook

  • Bullish Scenario: A close well above the 60-day moving average at 34.46 would predict a move up toward previous short-term highs of the uptrend from June near 37.
  • Bearish Scenario: A reversal and close below the recent low at 32.47 would forecast a move down to the previous low of the downtrend from October at 31.15.

The bullish scenario is slightly more likely (~60% probable).

Oil Daily Chart Analyses

The following technical and cycle analyses provide short-term forecasts for the oil market. For intermediate-term outlooks see the latest intermediate-term forecast and for long-term outlooks see the latest long-term forecast.

Technical Analysis

Oil closed moderately lower today, moving down to a new low for the downtrend from September and beginning a test of congestion support at the 98 level. Technical indicators are bearish overall, strongly favoring a continuation of the decline.

Cycle Analysis

We are 8 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on October 1. The magnitude and duration of the beta phase decline reconfirms the current bearish translation and favors additional short-term weakness. The window during which the next STCL is likely to occur is now through November 1, with our best estimate being now through October 24.

  • Last STCL: October 1, 2013
  • Cycle Duration: 15 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: Now through November 1; best estimate now through October 24.
  • Setup Status: No active setups.
  • Trigger Status: No pending triggers.
  • Signal Status: No active signals.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A rebound and close well above the recent short-term high near 104 would predict a move up toward the previous high of the uptrend from April at 110.31.
  • Bearish Scenario: A close below¬†congestion support in the 98 area would reconfirm the downtrend from September and forecast additional losses.

The bearish scenario is highly likely (>80% probable).

Category: Forecasts, Short-term Forecasts


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